Hammond announced that councils would be able to charge 100% extra council tax on properties that have been empty for two or more years. Currently local authorities can charge up to 50%.
“It can’t be right to leave property empty when so many are desperate for a place to live,” the chancellor said in his budget address.
There are 1,652 empty homes in Kensington and Chelsea, the west London borough which includes Grenfell Tower, according to a leaked list. More than 600 of them have been empty for more than two years, and would be included in the higher tax.
Under Hammond’s plan, council tax on homes in the borough’s highest band would increase from £2,124 a year to £4,248. The average selling price there is £2.1m, with semidetached homes fetching an average of £6.2m. Some homes in the borough are valued at as much as £85m.
Henry Pryor, a buying agent for luxury property, said the increased tax would have no effect on wealthy buyers. “It would be water off an oligarch’s back,” he said.
Helen Williams, the chief executive of the charity Empty Homes, said the council tax increase would be little disincentive for those buying properties as investment. “For a very wealthy buyer spending millions, 100% council tax is not really enough of a disincentive,” she said.
The specialist trade magazine Inside Housing suggested there was a strong correlation between high house prices and the number of empty homes. “This will fuel suggestions that the so-called ‘buy to leave’ phenomenon – whereby investors buy properties to leave them empty – is rife in the borough,” the magazine said.
There are more than 200,000 homes in the UK that have been empty for more than six months, according to the latest government data.
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